Milestone House, Inc. dba Milestone Group Home. Financial Statements * * * * * December 31, 2012

Transcription

1 Financial Statements * * * * * December 31, 2012

2 Table of Contents Page Number Independent Auditors Report 1-2 Financial Statements Statement of Financial Position 3 Statement of Activities 4 Statements of Cash Flows 5 Notes to Financial Statements 6-9 Supplementary Schedule Schedule of Functional Expenses 10

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5 Statement of Financial Position December 31, 2012 Assets Current Assets Cash (Note 2) $ 50,788 Agency funding receivable (Note 2) 39,585 Prepaid Expenses 1,828 Total Current Assets 92,201 Property and Equipment, net (Notes 2 and 3) 33,490 $ 125,691 Liabilities and Net Assets Current Liabilities Accrued liabilities $ 50,976 Current portion of long-term debt (Note 4) 6,530 Total Current Liabilities 57,506 Long-Term Debt Notes payable - less current portion (Note 4) 15,134 72,640 Net Assets Unrestricted 53,051 $ 125,691 See accompanying notes and auditors' report. -3-

6 Statement of Activities For the Year Ended December 31, 2012 Revenue Program agency funding $ 455,407 Special events 26,501 Expenses Total Revenue 481,908 Costs of direct benefits to donors 5,997 Program Services: Residential foster home 397,571 Support services: Management and general 84,762 Fundraising 5,045 Total Expenses 493,375 Decrease in Unrestricted Net Assets (11,467) Unrestricted Net Assets at Beginning of Year 64,518 Unrestricted Net Assets at End of Year $ 53,051 See accompanying notes and auditors' report. -4-

7 Statement of Cash Flows For the Year Ended December 31, 2012 Cash Flows from Operating Activities Decrease in net assets $ (11,467) Adjustments to reconcile decrease in net assets to net cash provided by operating activities: Depreciation 14,315 Change in operating assets: Agency fund receivable (12,607) Prepaid expenses 2,190 Change in operating liabilities: Accounts payable (1,086) Accrued liabilities 34,299 Net Cash Provided by Operating Activities 25,644 Cash Flows from Investing Activities 0 Cash Flows from Financing Activities Payments on long term debt (3,307) Net Cash Used in Financing Activities (3,307) Net Decrease in Cash 22,337 Cash at Beginning of Year 28,451 Cash at End of Year $ 50,788 Supplemental Disclosure of Cash Flow Data: Cash paid during the year for: Interest expense $ 9,195 See accompanying notes and auditors' report. -5-

8 Notes to Financial Statements December 31, 2012 Note 1 Description of the Organization Milestone House, Inc. dba The Milestone Group Home (the Organization) was organized in California in 1992 and is an accredited residential program for young women, preparing them for independent and productive living. The Organization provides education support, behavior modification, leisure activity and independent living skills through in-house social workers and other childcare staff based on the needs of the current residents. Residents are referred to the Group Home by the San Diego County Health and Human Services Agency, Residential Services Unit, the Adoption Unit, the Program of the Mental Health Services Division, the Placement Unit of the County Probation Department or by placement referral designated by formal notice from the Institution s Evaluation Unit. The Home is accredited for six residents. Note 2 Summary of Significant Accounting Policies Basis of Accounting: The Organization maintains its accounting records on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Financial Statement Presentation: The Organization reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets, based on the following criteria: Unrestricted net assets represent expendable funds available for operations that are not otherwise limited by donor restrictions. As of December 31, 2012, the Organization has only unrestricted net assets. Temporarily restricted net assets consist of contributed funds subject to specific donor-imposed restrictions contingent upon specific performance of a future event or a specific passage of time before the Organization may spend the funds or recognize the support. Permanently restricted net assets represent those assets contributed to the Organization where the original dollar value is to remain in perpetuity as a permanent fund of the Organization. Cash and Cash Equivalents: The Organization considers all highly liquid investments available for current uses with an initial maturity of three months or less to be cash equivalents. Accounts Receivable: Accounts receivable represents amounts due in the ordinary course of business. Receivables are written off when they are determined to be uncollectible. Management considers all accounts receivable collectible, therefore, no allowance for doubtful accounts has been provided at December 31, See independent auditors report. -6-

9 Notes to Financial Statements December 31, 2012 Note 2 Summary of Significant Accounting Policies (Continued) Property and Equipment: Acquisitions of property and equipment of $500 or more are capitalized. Property and equipment are stated at cost, or if donated, at the approximate fair market value at the date of donation. Expenditures for maintenance and repairs are charged to expense. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets of 5 28 years. Depreciation expense for the year ending December 31, 2012 was $14,315. Contributed Services: It is the policy of the Organization to record a value for contributed services when such services require a special skill or enhance a non-financial asset. No such services have been recorded in the financial statements for the year ended December 31, Functional Allocation of Expenses: The costs related to providing the various program services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs benefited and the support services. Income taxes: The Organization is a not-for-profit organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and Section 23701(d) of the California Revenue and Taxation Code. The Organization has analyzed its tax positions taken for filings with the Internal Revenue Service and the state of California. The Organization believes that its income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse affect on the Organization s financial condition, results of operations, or cash flows. Accordingly, the Organization has not recorded any tax assets or liabilities, or related accruals for interest and penalties for uncertain income tax positions at December 31, All tax exempt entities are subject to review and audit by federal, state and other applicable agencies. Such agencies may review the taxability of unrelated business income, or the qualification of the tax-exempt entity under the Internal Revenue Code and applicable state statutes. There currently are no audits of the Organization s returns in process. In general, the Organization s federal and state income tax returns remain open for the prior three and four year periods, respectively. Management's Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. See independent auditors report. -7-

10 Notes to Financial Statements December 31, 2012 Note 3 Property and Equipment Property and equipment at December 31, 2012 follow: Vehicles $ 69,508 Furniture and fixtures 15,651 Leasehold improvements 4,661 Appliances 4,534 Note 4 Long-term Debt 94,354 Less: accumulated depreciation (60,864) Long-term debt consists of the following: $ 33,490 Note payable credit institution, collateralized by vehicle, payable in monthly installments of $650, at 6.99% interest, due on December $ 21,664 Less: Current Portion (6,530) $ 15,134 Maturities of long-term debt follow: Year Ending December $ 6, , ,132 $ 21,664 Interest expense for the year ending December 31, 2012 was $1,614. See independent auditors report. -8-

11 Notes to Financial Statements December 31, 2012 Note 5 Leases The Organization entered into a fifteen year lease for its facility in Oceanside, California at a monthly rate of $2,500 expiring November The lease provides for an annual increase of 2.5%, with a $40 per month cap. The landlord has waived the annual increase through December 31, Future minimum annual rentals under the facility lease follow: Year Ending December $ 30, , , , ,340 $ 185,140 Rent expense for the year ended December 31, 2012 was $30,000. Note 6 Subsequent Events The Organization has evaluated subsequent events through September 23, 2013, which is the date of the financial statements were available to be issued. In 2013, the Organization obtained an additional dba name Fostering Adulthood Jobs Network for the purpose of started a new program. The program will focus on mentoring former foster youth as they transition from the foster system to independent living. See independent auditors report. -9-

12 SUPPLEMENTARY SCHEDULE

13 Schedule of Functional Expenses For the Year Ended December 31, 2012 Program Services Management and General Fundraising Total Salaries and wages $ 249,059 $ 37,500 $ 4,167 $ 290,726 Occupancy expenses 27,805 9,268-37,073 Insurance 15,582 14, ,478 Payroll tax 23,445 3, ,262 Food and other household costs 14, ,766 Depreciation 12,884 1,431-14,315 Repairs and maintenance 11, ,554 Activity allowances 9, ,745 Interest expense 4,469 4,726-9,195 Vehicle expense 8, ,314 Legal and professional - 5,702-5,702 Client Expenses 4, ,296 Office expense 830 3, ,295 Miscellaneous 4, ,183 Clothing Allowances 4, ,103 Telephone 3, ,667 Employee benefits 2, ,921 Bank charges - 2,045-2,045 Education, training and subscriptions Advertising Travel Net Expenses $ 397,571 $ 84,762 $ 5,045 $ 487,378 See accompanying notes and auditors' report. -10-